Detecon Opinion Paper Honeycomb Management Excellence: Sustainable Performance Excellence in Procurement

Opinion Paper
Honeycomb
Management Excellence
Sustainable performance
excellence in procurement
2010 / 01
We make ICT strategies work

Honeycomb Management Excellence
Table of Contents
1 Sustainable Performance Excellence in Procurement ........................................ 3
2 Procurement Strategy.......................................................................................... 5
3 Procurement Organization................................................................................... 8
4 Procurement Processes .................................................................................... 12
5 Procurement Applications.................................................................................. 15
6 Procurement Intelligence................................................................................... 18
7 HR Management in Procurement ...................................................................... 22
8 The Authors ....................................................................................................... 26
9 The Company .................................................................................................... 27
Opinion Paper 2 Detecon International GmbH

1 Sustainable Performance Excellence in Procurement
Being a CPO these days is not as comfortable as it used to be some 20 or 30 years ago.
Almost everything has changed since then. Fierce challenges have come up from beyond
the horizon. Here are the most common and important ones:
Q Top management expects procurement to become a main contributor to cost
reductions and to profit increases.
Q In financial and enterprise risk management procurement starts to play a major
role.
Q Procurement is at the forefront of dealing with globalization issues.
Q Best cost country sourcing has become a permanent challenge for
procurement.
Q Companies compete for procurement professionals in a world-wide battle for
talent.
Q There is permanent pressure to save costs: “Do more with less!”.
These are the major challenges to be tackled. For the CPO it is therefore most important to
know which fields of action he/she has to face and what measures to take. With its
honeycomb model Detecon presents a holistic view for the CPO on all relevant fields of
action, the honeycomb model.
Procurement
Strategy
HR Management in Procurement
Procurement Organization
Sustainable
Performance
Excellence in
Procurement
Procurement Procurement
Intelligence Processes
Procurement
Applications
Figure 1: The Detecon Honeycomb Model of Procurement

The Detecon procurement honeycomb visualizes a management philosophy based on the

cross-links and interdependencies of the individual cells and points out where to act and
what to do. The six cells – strategy, organization, processes, intelligence, applications and
human resources – need to be targeted in order to identify actions and measures.
The challenge is to keep all these actions and measures well-balanced, because pushing
one and disregarding the other(s) will produce unsatisfying results. CPOs who are among
the leaders of the pack have mastered the challenge of identifying their needs and of
balancing the honeycomb as a whole. Their departments deliver a sustainable performance
excellence, which makes them valued enablers for the competitiveness of their company as
a whole.
In this opinion paper we describe every honeycomb cell, showing the challenges as well as
the most common problems. In examples from our daily consulting work we demonstrate
how to stay best-in-class. Feel invited to share our practical experience in facing and
addressing CPO challenges in order to find new ways to turn problems into challenges and
challenges into manageable solutions.

2 Procurement Strategy
a) CPO Challenges
Year after year CPOs are facing new challenges. Just picking a few CPO issues from a
comprehensive list you will find on almost all CPO agendas in 2009
a. pressure for spend savings and improvement of cash flow,
b. supplier risk management, trouble shooting or even rescue management for
financially staggering strategic suppliers,
c. need for cost cutting within procurement organization,
Those issues significantly vary from yesterdays challenges, when supplier sales forces were
dictating prices in seller markets with climbing raw material price levels and supply
shortages. Accordingly the focus of procurement strategy might have been on low-cost
country sourcing, partnership management and supply chain integration.
Resume: Procurement challenges are continuously changing and what CPOs obviously
need is a strong strategic capability which is able to
Q anticipate major changes in the business environment and their impact on
supply markets as well as management expectations towards procurement
(e.g. savings on top of budget, cash flow contributions versus EBIT effects),
Q provide profound supply market and supplier intelligence (e.g. price dynamics,
emerging suppliers, financial supplier performance and risks) and
Q transfer those findings into strategic plans for implementation within the
procurement organization (e.g. breakdown of saving targets to category
leaders or divisional procurement heads, setup and tracking of saving
programs, setup of supplier risk management).
b) Reality Check
Frankly spoken we only partly observe strategic procurement capabilities in the market
place. Of course most CPOs will state that procurement strategies are in place but on the
other hand significant challenges are not fully under management control.
Just a few questions as a kind of self assessment for CPOs:

Q How transparent are
O committed savings targets per sub-category versus
O achieved and approved savings year-to-date versus
O opportunity assessment for further savings per category,
O impact of budget changes on procurement targets and planning,
O planning and tracking of measures for target fulfilment?

Q How transparent is the financial constitution of your key suppliers and how fast
would you be able to fully substitute financially staggering strategic suppliers?
Q What about your insights into price dynamics of supply markets? Do you have
access to broad-range price benchmarks and understand your gaps against
best price as well as strategic levers for price optimization?
While many procurement organizations might answer those questions with YES in terms of a
high level understanding they are not able to provide facts and figures with the necessary
level of quality and detail (e.g. per sub-category and planned sourcing event). But exactly
those insights are necessary to get full management control on procurement performance
and achieve sustainable excellence.
Q Case study:
In summer 2008 procurement analysts of a global automotive supplier told us
about massive operational problems in their US plants due to the financial
breakdown of local tier 2 and 3 suppliers. Accordingly we assumed that this
issue was on the top management agenda. However they were not able to fix
those problems on short notice and ran in even bigger troubles in Europe
about 6-12 months later.
Resume: In many organizations strategic procurement capabilities are not where they ought
to be.
c) Best-in-Class
Based on our market insights we see the most advanced procurement organizations in
globally leading manufacturing and automotive companies.
Q In those companies procurement performance is not only on the top
management agenda with a CPO on board level but the CPO will also have a
strong focus on procurement strategy.
Q Procurement strategy formulation is not only a one-time-a-year exercise, but a
set of well defined strategic procurement processes is implemented and
continuously proceeded by highly qualified resources, among others
O procurement planning and target setting (as part of the enterprise budgeting
process) including quarterly updates (if necessary),
O performance management, which permanently tracks target fulfilment,
O permanent supply market analysis and price benchmarking,
O supply risk management, which permanently tracks suppliers’ financial performance
based on (nearly) real-time and reliable information,
O enterprise-wide development and execution of category and supplier strategies.

Procurement strategy framework
Direction Strategy Management

Setting Vision, Strategy and Targets Policy, Organisation, Processes Systems Methodologies
Sourcing Fulfillment
Product Development Market Research Supplier Selection Purchase Requisition
Demand Specification Risk Management Contract Negotiation Purchase Processing

Core
Processes Demand Planning Sourcing Strategy Contract Management Accounts Payable
Supplier Management
Supplier Information Supplier Selection Supplier Evaluation Supplier Development
Performance Mgmt. HR Mgmt. Infrastructure Mgmt.

Support
Procurement Reporting Selection Systems and Class. Mgt.
Processes
Procurement Controlling Development Knowledge Management
Strategic procurement processes
Figure 2: Detecon’s Procurement Strategy Framework
Q Leading procurement organizations typically install a dedicated unit for

procurement strategy. Critical success factor is to provide real-life procurement
experience in the strategy unit and a strong interaction with sourcers and
operational buyers.
But of course the whole procurement organization has to contribute in order to achieve a
strong strategic procurement capability:
Q Procurement business intelligence has to provide a common framework for
planning and reporting (category codes, spend planning logic in line with
category based reporting structure), high data quality and of course a
comprehensive reporting repository (KPIs/reports, views, different levels of
detail),
Q Procurement HR Management has to provide the necessary skills for strategic
tasks,
Q Procurement Systems Management has to provide supporting applications for
strategic procurement processes.
Resume: Although most procurement organizations have a lack of strategic procurement

capabilities you will find advanced best practices in the market place to learn from.
d) Core Messages
Q Strategic procurement challenges are continuously changing and what CPOs
obviously need is a strong strategic capability which helps them to get it under
management control.
Q Most procurement organizations have a lack of strategic procurement
capabilities today and under critical conditions this might become a real threat
for the company’s ability to run the business (break-down of strategic
suppliers!).
Q Advanced best practices can be observed in the market place (procurement
planning and performance management, supply market analysis and price
bench-marking, supply risk management, enterprise-wide development and
execution of category and supplier strategies). Based on our market insights
you will find them in globally leading manufacturing and automotive companies.

3 Procurement Organization
a) CPO Challenges
During times of financial crisis performance-related challenges for CPOs have become even
greater and they also differ significantly from those in the past, growth-driven years:
Q Global consolidation and management of a global procurement function
Q Position the procurement function and its value contribution within the
enterprise
Q Increase collaboration with other enterprise functions
Q Contribute to the company’s bottom line by cost-cutting in procurement
Q Manage mergers/de-merges from procurement’s point of view
In most enterprises, CPOs have changed the procurement organization over the last years
by implementing lead-buyer approaches across their enterprise and by establishing
preferred supplier strategies. Automation rates were improved by dedicated IT projects and
by implementing common commodity classifications within the procurement units of each
business unit.
b) Reality Check
Facing the challenges mentioned above, most CPOs have realized that the achieved
improvements in a national organization now will have to be lifted to a global scale in terms
of processes, governance models and IT. Furthermore, the successful establishment of a
global procurement organization requires a broader involvement of procurement in the
processes and networks of the enterprise at-large.
Experiences from huge procurement projects in blue-chip companies across several

industries have pinpointed a huge need for action concerning this point:
Q Organizational structures are often lacking the amount of flexibility and
responsiveness necessary for a successful implementation of global sourcing
strategies in more and more dynamic supplier markets. To benefit from
sourcing opportunities in global markets, agile sourcing officers are needed,
with a well-gauged and approved balance of power between regional and
central competencies in combination with expert knowledge about individual
markets.
Q The procurement organization seldom reflects the overall strategy and mission
of the procurement function and is still constrained by traditional structures and
hierarchies.
Q Although the position of the procurement function within the enterprise is
becoming more and more important due to the increasing share of material
cost and purchased services, existing collaboration models for the procurement
function are still very limited. With the exception of engineering and production
departments – the traditional partners of procurement – collaboration with other
departments is seldom taking place.

CPOs still seem to underestimate the challenges of global sourcing. Taking advantage of
global sourcing requires more than identifying suppliers in low-cost countries and successful
contract negotiations. Experiences from global sourcing projects revealed the critical
success factors:
Q In-depth knowledge about individual markets and supplier structures, including
soft factors such as language and cultural behaviour
Q Extended time frames for screening and testing of suppliers from low-cost
countries
Q Strong focus on quality management to ensure compliance with quality
specifications as well as aspects of corporate responsibility
Regional sourcing officers provide the necessary skills and knowledge on-site. They need to
have the necessary amount of competencies and maneuvering room to establish successful
supplier relations with suppliers from low-cost countries. CPOs must focus on a well-gauged
balance of power between regional units and central sourcing units located at headquarters.
Efficient and effective processes for successful global sourcing and cost-efficient operational
procurement call for end-to-end integrated IT solutions as described in the honey comb cell
“Applications” and a lean and powerful organizational structure. Critical success factors are:
Q Clearly-defined leadership for category management on a global scale and
strategic sourcing for all categories relevant for global sourcing
Q A separation of sourcing and operational procurement activities due to the fact
that the guiding principles for these areas are different: deep category and
market expertise to maximize savings versus efficiency and customer
satisfaction in the processing of operational procurement tasks
Q A capability to execute global sourcing strategies with an efficient management
of key suppliers in their markets
c) Best-in-Class
Best-in-class enterprises established global sourcing units by bundling the purchasing

volume from all subsidiaries worldwide. The highly skilled employees are freed from
operational procurement tasks in order to increase their air time for strategic sourcing
activities. Operational procurement tasks are allocated to shared services. For standard
commodities, the transactional services are either provided by outsourcing partners or
shared services centers located in low-cost countries. CPOs have to assess the
performance of their procurement organization using the benchmarks set by enterprises who
have successfully adapted their procurement organization.
Finally, the scope and intensity of the procurement collaboration network within the
enterprise is an appropriate indicator for how the procurement organization sees itself within
the enterprise. Market leaders have understood the constantly increasing leverage on the
companies’ bottom line that could be achieved by a complete empowerment of the
procurement function. Early involvement of procurement in product development and
marketing processes opens up the possibility to leverage innovation potential from suppliers
for product development, thus improving market attractiveness.

On the other hand, procurement experts can help to realize savings by influencing the
selection of equipment and material to be integrated in the final product during the
development phase – in close cooperation with technical specialists from product
development, production and marketing professionals.
A closer collaboration with other departments in the enterprise leads to a break-up of

traditional organizational structures in favor of interdisciplinary teams working together in
projects where product development and sourcing activities are combined.
We have observed some case studies from leading enterprises in different industries:
Q A global mobile telecommunications service provider implemented a global
category management and concentrated all resources for sourcing activities for
selected categories such as IT and IT services, network equipment and general
procurement in one single location in Central Europe.
Q A world-leading automotive manufacturer has established interdisciplinary
teams with experts from marketing, product development, production and
procurement working together during the product development and pre-
production process. The early involvement of procurement ensures the
realization of savings potential by optimizing the choice of components within
the product design and development process.
Q A leading ICT service provider separated its strategic sourcing activities from
operational procurement. A harmonized procure-to-pay process was developed
including a special routing logic ensuring the involvement of strategic sourcing
experts when the amount of goods or services to be sourced is above defined
values. If the values are below the threshold, sourcing activities are executed
by employees from the operational procurement unit.
Focus Value driver
Q Bundling of purchasing volume for each category

Q Establishing of enterprise wide category
management Savings
Strategic
Sourcing Q Increasing category, supplier and market expertise &
on global markets Value contribution
Q Implementation of global key accounts for important
suppliers
Separation
Q Increasing process efficiency through streamlined

processes and automation
Q Bundling of administrational tasks to further improve Efficiency
Operational
Procurement
efficiency and gain more air time for a closer &
collaboration with internal customers Quality
Q Continuous improvement of procurement processes
and applications
Figure 3: Separation of strategic sourcing and operational procurement at an ICT service provider

d) Core Messages
Q Enterprises operating in global markets have to streamline their procurement
organization and harmonize their operational and steering processes to
achieve more flexibility and agility in the interplay between procurement
headquarters and regional sourcing units. Experiences and lessons learned
from successful global sourcing projects have to be anticipated and spread
rapidly across the whole organization. This is necessary to take advantage of
global sourcing opportunities.
Q Best-in-Class enterprises have realized the increasing importance of
procurement. Procurement is gaining more responsibility, steering internal and
external logistics and contributing with excellent know-how about supplier
markets and products in early stages of the product development process.
Teamwork in interdisciplinary project teams has replaced traditional
administrative procurement activities.
Q CPOs are facing the challenge to strengthen the position of procurement within
the enterprise’s top management. In order to achieve this, they have to
emphasize procurement’s increasing share of the overall value creation
process.

4 Procurement Processes
a) CPO Challenges
The megatrend of shifting value creation from internal sources into the supply network is still
prevailing, although the economic downturn has been superposing many agendas last year.
And with it supply management and especially procurement is gaining more and more
importance.
The CPO is challenged to build a global corporate procurement function. Very often this
means integrating the procurement divisions scattered all over business units, affiliates and
subsidiaries with their different processes and policies, into one seamless procurement
function. This is additionally complicated because many companies are not static, but
constantly changing because of mergers and divestments. To further hinder things
procurement is constantly challenged to do more business with fewer resources. For
operational procurement this means raising the efficiency in order processing, whereas in
strategic procurement more value has to be created with the same or even less staff.
b) Reality Check
All these challenges have one thing in common: To gain sustainable excellence any CPO
needs a strong procurement process management capability. This is true despite the
perception of most CPOs that they have been changing procurement processes for years
and that every change takes a very long time to be implemented and is not really
satisfactory. So most CPOs are not happy with their procurement processes.
Q Procurement processes are not harmonized on a corporate level. Processes
are varying in different business units, countries or categories. In many projects
we encounter even diverse operational procurement processes for the same
category in the same country, but in different strategic business divisions. As
only one process can be optimal, the average process performance will be
lower, with negative effects on procurement efficiency.
Q Typically processes are not optimized end-to-end, but only on the division or
department level. A particular example for this is the requisitioning process and
the quality of requisitions that reach procurement. Some requisitions come with
excellent quality. All necessary data are filled in and the requisitions could be
processed automatically. But more often than not procurement receives
requisitions nobody can work with. The line item description is poor, financial
data are missing, delivery dates and the like are left out and so on. And for
some requisitions a call of the annoyed internal customer reaches procurement
first: “Why are you not buying the things I need for my work?” The requisition in
question is often still in the approval process with some internal stakeholders,
but the fault is attributed to procurement. In all these cases procurement
spends valuable time to complete the requisition before being able to process
an order.
Q Frequently no clear separation of operational procurement and sourcing
processes can be observed. The first purchaser who picks up the requisition
will process it to the very end. Even if a complex sourcing event is necessary
which this particular agent is not familiar with.

Q Things are even worse for category and supplier management, where often no
common processes are in place. Usually different processes and procedures
are in place across categories, business units or foreign affiliates. Even supply
organizations with a good reputation as frontrunners have no harmonized
processes in this area.
Q Even if companies have harmonized processes in theory, there are many
microscopic differences. Requisition approval and order signing processes are
identical on a steering level across the whole company. But on the operational
level there are differences when to involve controlling or which management
level is authorized to sign an order worth € 125,000.000.
Q Even open non-compliance can be observed. Typically this increases along the
way from operational procurement through sourcing to category and supplier
management. The inevitable argument goes like this: “We don’t want to be
distracted from value creation by merely following formal processes.”
Q Typically the efficiency of processes is not currently known. Targets are set on
an annual basis. Controlling picks up the data and reports target fulfilment two
or three months later.
c) Best-in-Class
Despite all these obstacles some procurement departments are consistently in the best
quartile of their respective peer group when it comes to the quality of the process cell. For all
of them this is due to one factor: they manage their processes. In our opinion no company
can stay at the top if it does not constantly work on its processes.
BD 1 )
As-Is
BD 2
BD 3
BD 1
To-Be
BD 2
BD 3
Figure 4: Harmonization of different business division (BD) processes with one master process and slight
division specific variants.
Q To implement world class procurement a leading automotive manufacturer

started a procurement process optimization project. The target of this project
was to design one standard end-to-end, procure-to-pay process for all business
units and categories. The company reached its target by implementing a
standard process backbone by allowing only slight local process variants.

By cleaning up the process cell in this way, purchasing will at least be average. But the real
frontrunners leverage the process cell by also utilizing the other cells of our honeycomb
model.
Q In the above example the automotive manufacturer supported the new
standard process with a standard software solution and only allowed variants if
they are compliant with this solution. As a matter of fact process compliance
can easily be facilitated if processes and applications are aligned. Additionally
a target system was designed and the respective KPIs for the processes are
now consistently collected and reported from the procurement application.
Q Another example comes from a global telecommunications company which
wants to build the best procurement function in its industry. A main lever to
reach this target is the optimization and harmonization of the scattered
procurement processes which were different in its strategic business units,
categories and countries. The different processes were benchmarked and best
practices were identified. As a key feature the processes are harmonized over
business divisions and countries, but are kept slightly different to allow for
category-specific needs. Interestingly for every category at least one leading
edge process could be identified in the different business divisions or countries.
The handling of such a complex process landscape needs special process
know-how, combined with a high degree of knowledge of procurement itself.
Therefore this is done by a newly formed procurement process department
responsible for process management across the international procurement
function. Finally together with IT best practices in automation are evaluated and
rolled out across all categories and countries
Q A last example is again from a leading automotive manufacturer. In this case,
process management is already established as an organizational unit. To
further increase performance, this unit has a direct reporting line to the CPO
and is therefore closely aligned with procurement strategy. Clear objectives
and changes in procurement strategy are communicated directly to
procurement process management and will be implemented without delay. In
times of fast changing business environments this is a clear advantage.
d) Core Messages
Q Although many CPO challenges are interrelated with processes, most CPOs
are dissatisfied with their process performance.
Q Continuous management of the processes is the basis, but to reach
sustainable performance processes should be harmonized according to the
identified best practice across the company and kept slightly category-specific.
(e.g. direct goods and capital goods). A benchmark against external best
processes is crucial to stay in the lead.
Q Real-world best-in-class can only be achieved by leveraging the process cell
with organization and applications.

5 Procurement Applications
a) CPO Challenges
Procurement is in the spotlight. As an internal business service function procurement is

continuously asked to do more with less. The perpetual challenge of the CPO is to deliver
more value and additional savings with fewer procurement professionals. As far as strategic
sourcing is concerned there is a never-ending sequence of short-term cost saving initiatives
on top of the budget plan. A key challenge is to get all spending under the control and
management of procurement. On the operational level both process efficiency and internal
customer satisfaction have to be increased simultaneously. In addition cash management,
supply base management and risk management have never been more important and more
challenging than in the current economic situation.
b) Reality Check
Information technology is probably the most important enabler to solve a CPO’s challenges.
Without leading-edge procurement applications there is no way for procurement to perform
as expected. But in reality most CPOs are not at all satisfied with their procurement
applications, and they consider IT more to be an obstacle than a key enabler. As illustrated
by the following examples the procurement applications often do not meet a CPO’s
expectations:
Q Prior to supplier negotiations it is extremely burdensome to aggregate all
information (contracts, order and invoice volume, performance reports, etc.)
from numerous strategic and transactional procurement applications into a
complete and accurate picture. Global spend and contract visibility are missing.
Supplier performance and risk management information are outdated and
incomplete. Sales representatives using powerful CRM tools have a clear
advantage over sourcers working with cumbersome procurement applications
and Excel. It is an unfair battle with unequal weapons.
Q Concerning global spend analysis there is no single point of truth. Both on
entity and corporate level there are several reporting and spend analysis tools
producing contradictory results. Data quality is typically a mess; especially
spend figures are assigned to the wrong commodities or to the wrong
suppliers. The CPO does not even have a correct top supplier list, because
supplier affiliations are not depicted correctly. Furthermore spend data is not
current. It takes more than one month to consolidate and aggregate all spend
data from all legal entities worldwide.
Q Performance and excellence levels of the operational procurement processes
are disappointing or even unknown to the CPO. There are still lots of manual
steps in the processes, the automation and no-touch rate are low, and
productivity, measured in order line items per day and employee for instance, is
below best-in-class benchmarks. This is for the most part caused by outdated
operational procurement applications, which do not adequately support and
automate the operational procurement processes.
Q Usability and response times of procurement applications are dissatisfying.
This leads to a low acceptance of self-service procurement applications, which
in turn causes low process efficiency, low process compliance and maverick
spending.

c) Best-in-Class
The messy state procurement applications are in cannot be explained by shortcomings of

the IT department alone. In fact suboptimal procurement applications are usually a symptom
of shortcomings in the other cells of the procurement honeycomb. IT requires clear
guidelines and directions. If there is a professional process management and if the end-to-
end processes “source-to-contract” and “procure–to-pay” are specified, then a well-
functioning procurement application can do its job. On the basis of a vaguely defined
organizational procurement model it is difficult to implement world-class procurement
applications, because undefined workflows are hard to design. So it is a prerequisite for
leading-edge procurement applications that all cells in the business honeycomb have done
their homework first. Best-in-class cases, which are presented below, typically excel in a
close cooperation between all the cells in the business honeycomb, including the
procurement applications cell.
Although a number of procurement technologies have entered mainstream adoption, there is

significant and continuous innovation. Leading procurement organizations leverage state-of-
the-art best practices of leading solutions providers and push market innovations into their
organizations. For example leading-edge sourcing suites supporting the complete “source-
to-contract” process are a powerful enabling technology and transformation vehicle capable
to take strategic sourcing to the next level of excellence. Actually these sourcing suites are
the “CRM of procurement”, empowering strategic sourcers and providing for corporate-wide
procurement transparency and visibility.
Q A global engineering company streamlined its spend analysis in order to have a
single point of truth concerning the total enterprise spend. In one central, global
procurement data warehouse all contracts, purchase orders and invoices were
collected from all entities. A fast and standardized data delivery process was
established. In order to ensure good data quality, key master data, such as
suppliers, are managed centrally. Furthermore an intelligent data enrichment
and quality enhancement tool has been implemented to automatically identify
and eliminate input errors, such as incorrect category assignments. A state-of-
the-art frontend makes the spend analysis more user-friendly.
Q A global telecommunications company created a shared service center for
procurement operations providing operational purchasing services to all
business units. The efficiency level of the SSC is monitored with performance
KPIs, which are compared with world-class benchmarks. By setting up an
efficiency program the efficiency level of the SSC was increased continuously.
Most efficiency measures have leveraged the power of IT. By fully utilizing the
automation potential in existing procurement applications and by establishing
category-specific best practice solutions, e.g. for services procurement, the no-
touch and automation rates have been increased significantly.
Q Employees are used to well-designed, user-friendly web frontends, such as
they find them in Amazon or Google. The “internet experience” has raised the
bar for self-service procurement applications, but many standard procurement
applications are still not very user-friendly. A leading telecommunications
company realized that this is not a soft issue, because both efficiency and
internal customer satisfaction depend on it. Therefore the usability of the key
procurement applications was significantly improved. The results and positive
effects are quite convincing.

Q An automotive manufacturer defined an end-to-end process framework for its

procurement processes. The target processes were specified top-down with a
high level of detail. Functional requirements were assigned to the process
steps, which formed the basis for evaluating the software providers. The detail
level of the process specification was increased further after selecting the best-
fitting vendor. Maximum standardization was ensured by strict policies and
governance. All deviations from the standard and all process variants required
a committee approval based on a business case justifying the effort. This strict
methodological approach ensured best-in-class applications with highly
standardized, end-to-end processes.
Q Leading procurement organizations have a clearly-defined procurement
systems strategy, which of course is aligned to the overall business and
corporate procurement strategy. Basically the procurement systems target
architecture, the building blocks and an implementation roadmap are defined
and updated on a regular basis. All short-term projects have to pass the test
whether they are moving into the right strategic direction and whether they fit
into the defined target architecture.
Buyer Portal
Business Intelligence & Spend Analysis
Requisitioner Portal
Supplier Management Solution Services Procurement Solution
Supplier Portal
eSourcing, Rfx & Auction Tool Self-service eProcurement Solution
Contract Management Solution Content & Master Data Solution
ERP Backend System
Integration Layer
Figure 5: World Class Procurement Systems Target Architecture
d) Core Messages
Leading-edge procurement applications are probably the most important enabler to solve the
CPO challenge to do more with less. But in reality most CPOs are not at all satisfied with
their procurement applications and consider IT more to be an obstacle than a key enabler.
Best-in-class cases typically excel because of a close cooperation between all the cells in
the business honeycomb, including the procurement applications cell. Procurement leaders
leverage the full potential of procurement applications and have a clearly-defined
procurement systems strategy and roadmap.

6 Procurement Intelligence
a) CPO Challenges
In economically difficult times characterized by declining sales and shrinking market shares
as a result of decreasing consumption, risk management and contributions to improve the
bottom line are vital to stabilize the enterprise’s economical basis and to ensure survival in
highly dynamic markets. Both these goals are the responsibility of the CPO, right at the top
of his/her agenda. A necessary prerequisite for both mentioned topics is a valid database
providing the information required for tracking the financial situation of key suppliers or
offering transparency about the utilization of the enterprise’s spend cube. These are just two
important topics falling into the responsibility of procurement intelligence and receiving a lot
of attention from CPOs these days.
In order to achieve major contributions from the purchasing department to the company’s
overall bottom line and business stability, he/she has to overcome some well known
challenges. The “big five” of them are listed below:
1. Position procurement as a valued business partner within the enterprise, delivering

transparent benefits to the company’s bottom line and creating value for internal
customers
2. Gain full transparency about the enterprise spend in order to get the best possible
leverage on the savings potential hidden in the spend cube.
3. Establish powerful performance measurements for strategic and operational

procurement to identify and realize further improvements in effectiveness and efficiency
in procurement processes, organizational structure and supporting IT. Also improve
responsiveness to unexpected developments.
4. Achieve major improvements in risk reporting, especially for key suppliers. Safeguarding
a constant supply stream from key suppliers within the supply chain is vital for the
enterprise’s market success.
5. Ensure enduring high performance in procurement by establishing continuous

improvement and benchmarking processes.
b) Reality Check
Even today, procurement is still up against its image of a static bureaucratic business unit
mainly executing necessary operational tasks. Although the importance of procurement is
strongly increasing due to a constantly rising share of the purchasing volume in the overall
added value of a company, procurement is not yet established in an adequate position within
most enterprises. In our experience from numerous procurement projects in blue-chip
enterprises across different industries there is a wide scope of reasons for this unsatisfying
situation:
Q Benefits realized through effective spend management, streamlined
procurement processes and intelligent supply chain integration of key vendors
are often not transparent and in consequence not visible for important
stakeholders within the enterprise.

Q The quality of available spend data is insufficient to fully leverage the savings
potential hidden within a company’s overall spend cube.
Q The informational value of the key performance indicators commonly used for
steering the procurement unit is low. Needs for action are often identified too
late or – in the worst case – do not even show up in the regular procurement
performance reporting.
Q On a more general level, it is time-consuming and uncomfortable to generate
reports for ad-hoc information requests. The desired current information is not
available at managers’ fingertips, slowing down decision-making processes or
increasing the probability for bad decisions.
Q Naturally, the amount and quality of available information required for a proper
assessment of key suppliers’ solvency is low. Surely it is difficult to obtain this
highly sensitive information. All the more, proper processes have to be in place
ensuring that even minor indications in the economical behaviour of the
suppliers are identified and reported safely and with care. The necessary
awareness and sensitivity to identify and handle this kind of information is often
not transparent to lower level employees.
Many of these problems result from a poor quality of the underlying database. Required
information is usually not available on an ad-hoc basis, the basic data has to be gathered
and conditioned in time-consuming processes. Often, the prepared report is still not sufficient
to answer all questions, which increases the danger of making bad decisions. Moreover,
time-consuming data retrieval processes are not suited to increase confidence in the
reported figures. In the worst case, the reported figures bring up even more questions, and
the whole process has to be repeated.
But how could that be in times of sophisticated business warehouse technology connected to
large databases with terabytes of data from mighty ERP solutions? Actually, it is more a
question of processes and data quality, and a question of adherence to governance rules for
data collection and data maintenance:
Q Taxonomy procedures for the classification of master data are often not
consistent across all business units and subsidiaries of the enterprise. Uniform
data formats are essential for the aggregation and assessment of data.
O If the description of a commodity or a service differs across the enterprise, a simple
question like ”how much do we spend for this specific commodity in a given year”
cannot be answered.
O Inconsistent descriptions of suppliers are making it impossible to evaluate the overall
annual spend going to a specific supplier for a certain commodity.
Q These two examples illustrate how difficult it can be to answer even simple
questions. Excellence in procurement intelligence means that this information
is available to a sourcer whenever it is needed for preparing negotiations with a
supplier.

Q Numerous different ERP applications – and this include separately customized

ERP applications from the same vendor – used as data sources for business
warehouse applications are still a big challenge in terms of data quality. A piece
of data extracted from the ERP backend can be turned into information, if the
context of the process creating the data is understood properly. Comparing
information from several backend systems requires an in-depth knowledge
about the underlying business processes. There is a negative correlation
between the degree of process standardization across the enterprise and the
effort required for data transformation. If the “business context” of the
information retrieved from one application does not match with the one of the
other application(s), the information value of the generated report is
questionable.
Q Once the information required for the preparation of supplier negotiations is
gathered and the negotiations were concluded successfully, this success has
to be assessed and monitored. This is a stage in the process where enterprises
often accumulate backlogs. Measuring and tracking sourcing performance has
to include both – achieved savings and value added by the procurement
function. The challenge is to implement a clearly-defined set of governance
rules for the accounting of savings with or without a direct effect on EBIT. Of
course, the recorded savings have to be aggregated across commodities,
business units, timelines and other dimensions in order to enable a continuous
tracking of targets achieved as part of the overall procurement scorecard.
Q Procurement units struggle to put well-defined processes and clear governance
rules in place when it comes to managing the identification and handling of
information suited to assess the behaviour of a supplier and to enable
conclusions about his economic situation. It is not sufficient to have this
valuable information in the heads of individual employees. It has to be
identified, validated and consolidated into a complete picture. Only then can it
serve the assessment of supplier-related risk.
c) Best-in-Class
Project experience has proven the hypothesis that procurement intelligence is both – a hot
topic of great importance for the enterprise and at the same time a topic with significant open
questions requiring swift answers.. This observation has been made across different
industries. However, leading companies, especially in the manufacturing and automotive
industry, have started extensive projects to improve their capabilities in procurement
performance measurement for the most pressing topics:
Q Set up the prerequisites for informative reports and improve data quality by
harmonizing master data management processes and by introducing a single
classification logic across the whole enterprise – combined with the introduction
of dedicated master data management applications
Q Establish state-of-the-art business warehouse applications across the entire
enterprise to gain transparency about spend and other procurement data.
Report and monitor procurement’s performance with a well-defined set of KPIs
grouped together in a KPI scorecard.

Example for procurement performance KPI scorecard

Q Category-wide standardized
Overview Evaluation Dimensions Distribution KPIs
Period:
2. HY 2008 Period: 2. HY 2008 (Pre-Period: 1. HY 2008)
corporate KPIs including
attributes enable comparable
score (school no. KPI no. KPI no. KPI no. KPI no. KPI no. KPI
grades) actual pre- actual pre- actual pre- results
actual period period period period period period period Comments
3,4 0 0 3 0 1 0
1. Commercial and Contracts
Q System-supported supplier
2. Logistics 3,2 0 0 1 0 1 0 1 KPI currently n.a.
cockpit displays suppliers’
3. Quality 2,3 1 0 1 0 0 0 1 KPI currently n.a.
2,1 3 0 0 0 0 0
strengths and weaknesses and
4. Innovation and Technology
5. Key Financials 0,0 0 0 0 0 0 0

enables corrective measure
6. Sustainablity Management 2,0 3 0 0 0 0 0
supported by normative
development strategies
Total Result (without Sustainability) 2,7 7 0 5 0 2 0
Q Key Financials are integrated in

Development in Comparison to Other Supplier
the KPI scorecard as important
Performance Results Plan IBM
2. HY 2008 IBM
indicator from risk reporting
Commercial and Contracts 2,0 3,4
Average top supplier point of view
Evaluation Dimensions
2,5
Logistics 2,0 3,2
2,5
Quality 2,0 2,3 2,5
Q Key to the success is the close
Innovation and Technology 2,0 2,1 2,5
integration into the Supplier
Key Financials Development Strategy
Sustainability Management 2,0 2,0 2,5
and the incorporation of the
0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0
School Grades
needs and requirements of the
project's stakeholders
Figure 6: Example of a KPI Scorecard in Procurement
Q Implement clearly-defined guidelines how to evaluate and track savings and

added value created by the procurement function, supported with easy-to-use,
web-based IT applications for recording and monitoring.
Q Establish risk management processes in procurement in order to increase
employees’ awareness of useful indicators helping to continuously track and
assess the financial situation of suppliers. Hence, a well-designed guideline
defining how to collect and report indicators for a potential insolvency in the
behaviour of the supplier has to be in place in the procurement function in order
to focus the attention of every employee in procurement. At the same time, the
process has to make sure that suspicious facts are treated confidentially in a
professional manner, and that information is getting validated and kept within
the enterprise.
d) Core Messages
Q Data quality strongly depends on how far processes have been harmonized
and standardized and how well the enterprise as a whole adheres to valid
standards, e.g. in the classification of commodities or the management and
distribution of master data. Poor data quality leads to bad reports. Potential
Savings in spend are not even identified – even though the company needs
them very urgently these days.
Q Most procurement organizations do not succeed very well in making their
performance and added value visible to stakeholders within the enterprise. A
clearly defined process to record achieved savings and added value by the
procurement function is an absolute must and the first step on the way to
improving the perception of procurement within the enterprise.
Q Globally leading enterprises have dedicated processes and tools for risk
management in place – especially for evaluating the financial situation of key
suppliers. They combine internal and external knowledge bases to draw a clear
picture of the current situation and to enable an up-to-date, transparent
assessment of the actual risk situation at all times.

7 HR Management in Procurement
a) CPO Challenges
The rapid metamorphosis of procurement from a mere operational function for executing
purchase orders to a strategic business function is unthinkable without globalization.
Globalization with its various facets shifted the importance of procurement functions from
operational purchasing to strategic sourcing, adding complexity to almost anything from
strategy to reporting, from processes to applications and from organization to HR relations.
The objective for procurement management with regard to these developments is to aim not
only for adaptive organizations, processes and systems, but also for the recruitment of
competent, flexible and adaptive people. This means they have to present the procurement
area as attractive as possible for current and future employees, and it shows the necessity
for reconsidering HR strategies and policies related to procurement. Skills and qualification
profiles for procurement staff have to be redefined with globalization and its challenges in
mind.
b) Reality Check
People have always been a valued success factor for any procurement department. What
we’ve all observed over the last years is that procurement staff were facing a multitude of
changes within their working environments. They had to learn new methodologies and adapt
to frequently changing processes and technologies. The speed of change was increased
every time, while cycle time was reduced continuously. In everyday life this adds a lot of
friction to many people-related issues. What are the pain points?
Q Recruitment also means attracting young high potentials. You may find out that
procurement’s reputation is comparably low in the perspective of those
candidates. In contrast other departmental functions, such as sales and
marketing, are generally a lot more attractive to young high-flyers. Procurement
is viewed as an unchallenging service function and it is supposed to offer few
opportunities to move into top management positions after a while.
Q Reorganization projects these days often focus on centralizing strategic
sourcing functions while carving out operational procurement staff into a shared
services center, or even outsourcing them completely. It is quite a good guess
that about half of the remaining staff will not meet the newly-defined
requirements of the organization. One approach of procurement management
is to get rid of those who don’t fit in, let them participate in termination
settlement programs, and advertise for qualified external staff. But this may
cause extensive negotiations with the people affected or with the works council.
And solutions to deal with that situation are usually not at hand when needed.
Q Frequently procurement staff who is usually engaged with operational
procurement activities will be allocated to strategic duties, e.g. the preparation
of vendor reviews and negotiations or the continuous assessment, evaluation
and classification of procurement categories. The result is that people are
overwhelmed with their new challenges, and even though they keep on
struggling, they will eventually fail.

Q Ever tried to convince local procurement staff to spend some years abroad to
establish a facility, e.g. in Asia? Ask around in the procurement department
who would volunteer to relocate for at least three years to build up a powerful
and effective local procurement function for a foreign subsidiary. The echo
usually will be frustrating. The most common reasons for this are not
procurement-specific: Rudimental expatriate programs with no real advantages
combined with a lack of job security and no career growth path on return home.
c) Best-in-Class
Procurement usually deals with buying goods and services. And usually the position of a
buyer is strong and dominant as most markets are demand-driven these days. Sourcing
qualified staff externally or persuading internal staff to move internally or to migrate to distant
locations even abroad is not that easy.
Companies are facing a fierce competition for talent between global enterprises – particularly
in the telco market. In addition, procurement is not on top of the wish list of high potentials,
due to assumed unchallenging career perspectives. The procurement talent market is
supply-driven these days and “sourcing and buying talent” has become definitely a SALES
job. It must therefore be one of the foremost objectives of every CPO to position his/her
procurement department as attractively as possible in order to stand in the forefront of
“suppliers” of attractive positions for job applicants, be it internally or externally, if the
objective is performance excellence in procurement.
Now changing sides from a buyer to a seller in terms of staff recruitment and development
may not be everyone’s favourite, but it is necessary. We will give a few examples how the
leaders in sustainable performance excellence in procurement have remained successful.
Q A client in the telecommunications business planned to “refresh” the
procurement team by attracting young high potentials. But they had few
positive responses. During interviews they found out that procurement in
general had a lower reputation in the perspective of the candidates than other
departmental functions, due to higher salary expectations and to challenging
career opportunities in functions such as sales and marketing, production or
finance and controlling. Formulating a conjoint procurement recruitment
strategy with a procurement branding concept that was supported by published
articles in relevant publications, by attending job expositions, talent fairs and
alumni re-unions, they could present and market themselves directly to their
target groups. After that both contact and contract rates went up significantly.
Q During a reorganization project of several procurement units with the focus on
centralizing strategic sourcing functions as well as on carving out operational
procurement staff into a shared services center unit, one of our clients in the
telecommunications industry realized through a survey of staff skill sets that
most of the existing staff – about 50 % - were not meeting the defined
requirements of the target organization.
The first approach of procurement management was to get rid of those who
didn’t fit in and to advertise for qualified external staff, but this caused massive
problems with the works council. They also got few responses from outside
candidates, because parts of the lay-off program had been reported in the
media, and a company with a swift lay-off policy isn’t really attractive.

Reconsidering this challenge qualification programs were set up to empower a

major part of the current procurement employees to take over new tasks. The
remaining staff who were not willing or able to qualify could participate in a
comfortable termination settlement program which was stipulated in close
cooperation with the works council. All in all this solution turned out to be even
more cost-effective. The real advantage was that existing know-how could be
kept inside the company, and the costs of training and incorporating external
staff could be avoided.
Q One of our clients is in the automatic teller machines business, and its
procurement headquarters is located in Germany. They wanted to extend their
sourcing to the Asian market and to underpin this qualified procurement staff
that was asked to move to Asian locations. Upfront the interest of local people
to move abroad was not overwhelming as there weren’t real benefits and job
security on return home. Installing a complete expatriate program and
reworking the fringe benefits program in combination with individual return
guarantees and substantially higher benefits such as home and family support
and even salary rises made employee dispatching a continuous success.
Q Another best-in-class example: A client in the aerospace industry founded a
dedicated procurement academy for more than 3,000 procurement employees.
The objective was to continuously train the world wide procurement staff. The
benefit was a unified knowledge about processes, applications and terminology
on a company wide basis as well as standardized certificates and degrees.
HR Management for procurement consists of six integrated fields of action that have to be
addressed strategically and monitored and improved continuously. These fields of action are
illustrated in figure 7 below.
External Demand and Requirements
Procurement
Recruitment
Strategy
Procurement Skills and
Branding Qualification
Concept framework
HRM in
Procurement
HRM SWOT Benefits and

Positioning Compensations
Salary and
Outplacement
Internal Demand and Requirements
Figure 7: Fields of Action for HRM in Procurement

HRM SWOT Positioning

Perform a SWOT Analysis of your procurement area with regard to requirements relevant to
HRM. Compare your organization against the competition in order to see where there is
room for improvement.
Skills and Qualification Framework

Get a clear picture about the current qualification levels of your staff, elaborate on future
demands and locate the gaps to generate a medium-term action plan.
Benefits and Compensation

Rework your offering of benefits and compensation with a clear dedication to exceed market
standards.
Salary and Outplacement

Design a comprehensive and transparent salary framework for your valued employees while
offering generous outplacement options for those who do not meet your standards anymore.
Procurement Branding Concept

Be a true marketeer and communicate your values to the internal and external audience to
generate positive impact.
Procurement Recruitment Strategy

Aggregate all your findings and conclusions into a long-term, procurement-specific
recruitment strategy and implement it.
d) Core Messages
Q In order to win the battle for talent it is necessary to change roles. CPOs need
to become sales people offering attractive job opportunities in their
procurement department.
Q It is essential for a procurement organization to know the capabilities of their
staff. Even though people are in their positions for years, in many procurement
organizations no structured and detailed information about skill levels exists
and no formalized process is in place to collect such information on an ongoing
basis.
Q A mature training and qualification concept is often missing in procurement
organizations. All aspects about staff qualification, job descriptions and future
requirements need to find their way into a qualification and training concept.
Q Many procurement organizations facing the challenge of globalization still have
no real expatriate policies in place which would motivate employees to move to
other locations – domestic or abroad.

8 The Authors
Michael Hanke is a managing partner at Detecon International GmbH in Bonn, Germany

with responsibilty for the area of supply management. He studied electrical engineering at
the Technical University of Vienna. Hereafter he held responsible management positions in
various consultancies and IT service companies. His consulting focus is primarily on clients
in the automotive, high-tech and telecommunications industry in the areas of procurement
and supply chain management.
He can be reached at: +49 228 7002514 or Michael.Hanke@detecon.com
Dr. Thomas Krause is a managing consultant for supply efficiency and supply management
at Detecon International GmbH in Bonn and is holding a PhD in Physics from the university
of Würzburg, Germany. He has more than 13 years of consulting experience in several
responsible positions in IT-service and consulting companies and is currently leading the
supply efficiency team of Detecon Germany. He is an expert in raising the overall efficiency
of supply and logistics function and focuses on automotive, telecommunication and logistics
service providers.
He can be reached at: +49-151-14003076 or thomas.krause@detecon.com
Alexander Rinker is a management consultant for Supply Management and Supply

Efficiency at Detecon International in Eschborn, Germany. He studied business
administration at the University of applied sciences in Reutlingen. He has more than 18
years consulting expertise in supply chain management and sales logistics projects and
focuses on clients in production and telecommunication.
He can be reached at: +49 6196 903248 or Alexander.Rinker@detecon.com
Felix Theisinger is a managing consultant for Supply Management and Processes &
Applications at Detecon International in Bonn, Germany. At first he studied Information
Technology at the University Erlangen/Nuremberg and on top he completed successfully a
MBA Program at Kellogg-WHU in Frankfurt/Chicago/Hongkong. Based on his profound
project leadership and interims management experience he leads the team Supply
Management Processes & Applications.
He can be reached at: +49 228 7002554 or Felix.Theisinger@detecon.com
Michael Wettklo. His major topics include purchasing, procurement performance

management, business process reengineering, process-based implementation of
procurement applications and the development of IT strategies for the implementation
procurement applications. After earning a degree in economics, Michael Wettklo works as
Managing Consultant in the group Supply Management and is leading the team Procurement
Performance Management. He has gained a broad experience as a project leader in several
procurement transformation, reengineering and value chain optimization projects. On the
other side, he is also familiar with the challenges of implementing optimized to-be processes
from experiences as a project leader in several SRM/ERP implementation projects.
He can be reached at: +49-151-12101453 or Michael.Wettklo@detecon.com

9 The Company
We make ICT strategies work
Detecon is a consulting company which unites classic management consulting with a high
level of technology expertise.
Our company's history is proof of this: Detecon International is the product of the merger of
the management and IT consulting company Diebold, founded in 1954, and the
telecommunications consultancy Detecon, founded in 1977. Our services focus on
consulting and implementation solutions which are derived from the use of information and
communications technology (ICT). All around the globe, clients from virtually all industries
profit from our holistic know-how in questions of strategy and organizational design and in
the use of state-of-the-art technologies.
Detecon’s know-how bundles the knowledge from the successful conclusion of management
and ICT projects in more than 160 countries. We are represented globally by subsidiaries,
affiliates, and project offices. Detecon is a subsidiary of T-Systems International, the
business customer brand of Deutsche Telekom. In our capacity as consultants, we are able
to benefit from the infrastructure of a global player spanning our planet.
Know-how and Do-how
The rapid development of information and telecommunications technologies has an

increasingly decisive influence on the strategies of companies as well as on the processes
within an organization. The subsequent complex adaptations affect business models and
corporate structures, not only technological applications.
Our services for ICT management encompass classic strategy and organization consulting
as well as the planning and implementation of highly complex, technological ICT
architectures and applications. We are independent of manufacturers and obligated solely to
our client's success.
Detecon International GmbH

Oberkasselerstr. 2
53227 Bonn
Telefon: +49 228 700 0
E-Mail: info@detecon.com
Internet: www.detecon.com

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Opinion Paper

We make ICT strategies work

Opinion Paper 2 Detecon International GmbH

1 Sustainable Performance Excellence in Procurement

Figure 1: The Detecon Honeycomb Model of Procurement

Opinion Paper 3 Detecon International GmbH

The Detecon procurement honeycomb visualizes a management philosophy based on the

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Just a few questions as a kind of self assessment for CPOs:

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Opinion Paper 6 Detecon International GmbH

Procurement strategy framework

Direction Strategy Management

Demand Specification Risk Management Contract Negotiation Purchase Processing

Performance Mgmt. HR Mgmt. Infrastructure Mgmt.

Strategic procurement processes

Figure 2: Detecon’s Procurement Strategy Framework

Q Leading procurement organizations typically install a dedicated unit for

Resume: Although most procurement organizations have a lack of strategic procurement

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Experiences from huge procurement projects in blue-chip companies across several

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Best-in-class enterprises established global sourcing units by bundling the purchasing

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A closer collaboration with other departments in the enterprise leads to a break-up of

Focus Value driver

Q Bundling of purchasing volume for each category

Q Increasing process efficiency through streamlined

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Opinion Paper 12 Detecon International GmbH

Q To implement world class procurement a leading automotive manufacturer

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Procurement is in the spotlight. As an internal business service function procurement is

Opinion Paper 15 Detecon International GmbH

The messy state procurement applications are in cannot be explained by shortcomings of

Although a number of procurement technologies have entered mainstream adoption, there is

Opinion Paper 16 Detecon International GmbH

Q An automotive manufacturer defined an end-to-end process framework for its

Business Intelligence & Spend Analysis

eSourcing, Rfx & Auction Tool Self-service eProcurement Solution

Contract Management Solution Content & Master Data Solution

ERP Backend System

Figure 5: World Class Procurement Systems Target Architecture

Opinion Paper 17 Detecon International GmbH

1. Position procurement as a valued business partner within the enterprise, delivering

3. Establish powerful performance measurements for strategic and operational

5. Ensure enduring high performance in procurement by establishing continuous

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Q Numerous different ERP applications – and this include separately customized

Opinion Paper 20 Detecon International GmbH

Example for procurement performance KPI scorecard

5. Key Financials 0,0 0 0 0 0 0 0

Q Key Financials are integrated in

Figure 6: Example of a KPI Scorecard in Procurement

Q Implement clearly-defined guidelines how to evaluate and track savings and

Opinion Paper 21 Detecon International GmbH

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Reconsidering this challenge qualification programs were set up to empower a

External Demand and Requirements